David Lentz

Can Apple Sell 45m iPhones By End of 2009?

jescott418 -- if Apple were to open up iPhones to every carrier, what would be the carrier's incentive to give Apple ANY of the cellular revenue?

Let's think for just a minute about this. Assume that the amount Apple gets from AT&T is $10 per month of the cellular service plan revenue (I think that the vast majority of the guesstimates put it at a lot more than that). This means that if the average life of an iPhone is 24 months (and it had better last longer than the cellular contract!), the revenue from the carrier is $2400 on a device that sold for around $400.

That's the answer to your question. If Apple opens up the iPhone to any carrier, then they wind up losing a huge chunk of revenue. Maybe at some point, the desire to grow market share overrides the desire for profit, but I don't see that point coming any time soon, if ever.

As to whether or not there will be 45M people willing to sign with AT&T, I think that depends upon how attractive Apple makes the iPhone and how much AT&T decides to compete for cellular business -- would more people be willing to sign if the service contract was cheaper? If the iPhone cost less? How about if the iPhone had more hardware features (Bluetooth, GPS, video camera, yada yada yada)?. There is a lot that can be done to make the platform more attractive as the cost of technology declines.

I think that as more of the traffic moves to the internet (which the iPhone is doing great at, if Google's stats are to be believed), and given AT&T's desire to penetrate that market in a decisive manner, we might well see AT&T try to draw more customers in.

Plus, that 45M is not just AT&T. It represents all of the various carriers around the globe that have signed revenue sharing agreements with Apple. Looking at things from a global perspective, I think that 45M is a pretty easy target.